Rollercoaster Continues: Bitcoin Extends its Slide
On Monday, Bitcoin has started its unimaginable ride. The surge of crypto prices started thanks to institutional investors and major companies such as Tesla and Mastercard, which have started treating digital coins like more mainstream investment assets. Thus, making everyone follow their lead. Meanwhile, forgetting that market crypto can be extremely volatile.
The sudden fall of the skyrocketing crypto has turned every investor and trader into a bag of nerves. Even though we would genuinely love to calm all of you down and give the brightest hopes for BTC’s future, we can’t. Unfortunately, Bitcoin resumed its slide on Tuesday, tumbling as low as $45,041.
The world’s most valuable digital coin plunged 14% in just one day. How could have anyone imagine that after hitting 1 trillion in market value, BTC would slide down and be worth less than $900 billion?
Synopsis of the fall: How BTC rides the market waves
On Sunday, to crypto-miners’ and traders’ delight, Bitcoin hit a record high of more than $58,000. However, later BTC had fallen to $49,179 on Tuesday. At some point at the beginning of Tuesday morning, Bitcoin had shed 17% to as low as $44,888 on Coinbase. Thus, this became one of the most drastic falls since March 2020.
BTC, are you OK? Why is it happening?
Bitcoin is not controlled by any central authority. However, Crypto futures traders were borrowing ridiculous amounts of money to buy Bitcoin contracts. In fact, they caused borrowing rates to skyrocket. This situation could not continue. The market, as an artificial but structured organism, had to act. Thus, prices had to fall to shake out the over-optimistic borrowers and return borrowing rates to normal levels. The market is trying to stabilize itself.
BTC has enjoyed a strong start to the year. Thus, everything that’s happening is a very natural market response to Bitcoin’s uncanny rally.
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